CINDERFORD Mayor Max Coborn has called for Two Rivers Housing chief Garry King to resign from the town's regeneration board or stop a £12 million new HQ going to Newent.
Councillor Coborn is angry that the housing association has shunned Cinderford for the major new development.
Regeneration chiefs had hoped the investment would help kick-start the Northern Quarter project.
But even though Mr King is on both boards, Two Rivers said it could not wait for the regeneration project in Cinderford to get underway.
However, plans to build the new HQ in Newent have also been delayed amid concerns about smells from a sewage plant alongside the site at the Cleeve Mill Business Park.
The application was deferred this week after councillor Julia Gooch told the committee she had received an e-mail from Severn Trent saying the company did not normally recommend building within 480 metres of such a plant.
Councillors were told that a second application by Two Rivers for extra care and live-to-work units was 'invalid' at the moment.
Several councillors said the disgusting smell was present in a wide area around the Newent plant.
Councillor Julia Gooch (Ind, Newent Central) claimed Two Rivers staff wouldn't be able to open the windows because of the smell. Councillor Graham Morgan (Lab, Cinderford) said allowing the building could create a problem similar to the one at Ensors abattoir in Cinderford.
Calling for a deferment Councillor Norman Stephens (Ind, Westbury and Newnham) said: "I am used to country smells but this is appalling. I think there are going to be problems."
Meanwhile Coun Coborn said it was wrong that a man charged with regenerating Cinderford is moving 85 existing staff to new offices in a move that could lead to 55 new jobs.
Coun Coborn is sceptical of claims by Garry King that rent rises at Mitcheldean have prompted the move.
He said: "Why is a member of Cinderford's regeneration board spending millions of pounds in Newent?
"Cinderford is more central for people in the Forest.
"They will be out on a limb in Newent and the smell will be atrocious.
"They say they cannot wait for the Northern Quarter but I can't see the problem. Garry King should resign from the regeneration board."
Garry King said: "Two Rivers Housing remains heavily committed to the regeneration of Cinderford. Over the last four years we have invested more than £3 million in new homes in Cinderford, with a further £6 million committed to the area over the next three years."